FameEX Hot Topics | US Court Suspends 18-State Legal Challenge to SEC After Leadership Shift

A U.S. federal judge has paused a lawsuit filed by 18 Republican state attorneys general and the DeFi Education Fund against the Securities and Exchange Commission (SEC), citing the potential for the case to become moot due to recent leadership changes at the agency. Kentucky District Court Judge Gregory Van Tatenhove granted a 60-day stay on April 16, referencing a March SEC filing that indicated the leadership transition could lead to resolution. The parties involved are required to submit a joint status report within 30 days.

This development follows the recent appointment of Paul Atkins as the new SEC chair. A former Wall Street adviser and supporter of crypto innovation, Atkins replaced acting chair Mark Uyeda and succeeded Gary Gensler, who was known for taking a hardline stance on cryptocurrency regulation. Under Gensler’s leadership, the SEC pursued a series of enforcement actions against crypto firms, prompting backlash from the industry and state officials.

The original lawsuit, filed in November, accused the SEC of exceeding its authority by launching enforcement actions against crypto exchanges without proper Congressional oversight. The attorneys general, representing states such as Texas, Florida, Wyoming, and Kentucky, argued the regulator was attempting to centralize power and bypass state-level regulatory frameworks.

In a separate but related matter, the DeFi Education Fund, Blockchain Association, and Texas Blockchain Council dismissed their lawsuit against the Internal Revenue Service (IRS) on April 16. The case had challenged the IRS’s DeFi broker rule, claiming it was unconstitutional and beyond the agency’s authority. The voluntary dismissal came days after President Donald Trump signed legislation on April 11 revoking the rule, which would have required DeFi protocols to report transactions.

These actions signal a broader shift in regulatory tone, as the SEC under Atkins has already paused or dropped several high-profile crypto-related cases, indicating a potential change in strategy.

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